Axis Bank National Pension System

The National Pension System or the New Pension System offered by Axis Bank is a pension scheme that has been announced by the government of India. The main aim of the scheme is to ensure that those who subscribe to it have a source of income once they retire and it does so by investing the money in the markets to generate returns. The scheme also have two versions, the All Citizens Model and the Corporate Sector Model. The two are pretty much the same except for some minor differences. The contributions made towards these schemes also provide tax benefits to both employers, under the corporate model, and the citizens, under the all citizen model. The minimum contributions that are required for this account are such that most people can easily afford to make the contribution without it putting too much of a burden on their finances.

All Citizens Model

The All Citizens Model is an investment any citizen of India can make. It is even open to NRIs and can be opened by anyone between the ages of 18 years and 60 years. It allows for investments to be made in two tiers, Tier I and Tier II.

Tier I:

The minimum amount that needs to be contributed in a year is Rs. 6,000.

Contributions made towards this account cannot be less than Rs. 500.

There are no withdrawals permitted from this account during the vesting period.

Tier II

With this account the minimum annual balance that needs to be maintained every year is Rs. 2,000.

The contributions made should not be less than Rs. 250.

There is no limit on the number of withdrawals that can be made from this account.

Axis Bank National Pension System General Features

Of the two modes of investment options, the first is the Active Choice where the investor can pick from 6 different funds to invest in.

The second mode is Auto Choice that invests in Lifecycle Funds.

Investments made into this scheme are eligible for tax benefits under section 80C of the IT act.

The withdrawals made may be liable for taxes under EET.

The limit for contributions into this account is Rs. 1 lakh in a year.

A subscriber to this investment will be able to nominate up to 3 individuals for this account.

If more than 1 person is the nominee for this account, the account will have to be split amongst all the nominees.

In the case of a minor who is the nominee, details of the parents or guardians will be needed.

In case you want to exit the scheme before the age of 60 years, you will be allowed to withdraw 20% of the amount as a lump sum and will have to buy annuity for the rest.

Those who work in the unorganised sector can also join the scheme under the Swavalamban Scheme.

NPS calculator allows an individual to calculate the amount of pension amount they will get.

Corporate Model

The features of the corporate model are almost the same as the citizen model except for a few differences.

Companies will be able to make contributions towards the accounts of the employees that subscribe to this scheme along with the contribution by the employee.

The contributions made can be submitted for tax benefits by the company.

The employees will be able to transfer this account from one company to another when they change jobs.

Employees can also make contributions to these accounts and claim tax benefits on those contributions.

Eligibility and Documents Required for Axis Bank National Pension System

All Citizens Scheme

The Axis Bank National Pension account is available to all those between the ages of 18 years and 60 years.

Even if an NRI wants to invest in this, they can.

For all those employed by the government, participation in this scheme will be mandatory.

The key documents required will be the NPS Subscriber Registration Form along with the KYC documents and the NPS Contribution Instruction Slip.

Corporate model

The documents required for Axis Bank National Pension System are simple since all the company needs is to file an MOU with the bank to enter into the scheme. Once it’s in place, all the employees of the company will be able to participate in the scheme. The documents required for participation by the employee will be the same as the All Citizens Scheme.

The account can be opened at any of the authorised branches of Axis Bank.